The key to understanding what is underway is Mr. Zoellick’s speech to the Woodrow Wilson Center on April 14. This was probably the most important speech by a Bank president since McNamara’s Nairobi speech of 1973 – even more important, I would argue, than Mr. Wolfensohn’s 1996 speech on corruption. For the first time in many years, the Bank is at the leading edge of thinking about global trends. Mr. Zoellick’s blunt declaration that the era of the Third World is over and a new, more complex arrangement is emerging, challenges everyone at the Bank and everyone working in development to think and act differently. It sets in context why the reforms underway across many areas of the Bank are really necessary, why we need a new approach to investment lending, to knowledge, to our location and operation as a global bank.

The end of the Third World does not mean that there are no poor countries, or that all countries are equally advantaged. It means the landscape has changed so much that our thinking and behavior must shift. To think of China, India, Brazil, Mexico, Russia, South Africa and Malaysia as developing countries seems anachronistic. Yes they have poverty and challenges, but… “developing”? They play a regional and global role of real significance. They have civil servants, academics and businesspeople as skilled as (and many more skilled than) World Bank staff. Developing just doesn’t capture it.

At a press conference earlier today, World Bank President announced that the Development Committee approved a capital increase, as well as proposed voting reform for the Bank. In his remarks, Mr. Zoellick talked about how these changes will affect the institution, as well as international development on the whole:

"This extra capital can be deployed to create jobs and protect the most vulnerable through investments in infrastructure, small and medium sized enterprises, and safety nets. The change in voting-power helps us better reflect the realities of a new multi-polar global economy where developing countries are now key global players. In a period when multilateral agreements between developed and developing countries have proved elusive, this accord is all the more significant."

A summary of the changes approved by the Development Committee:

An increase of $86.2 billion in capital for the International Bank for Reconstruction and Development (IBRD).

A $200 million increase in the capital of the IFC.

A 3.13 percentage point increase in the voting power of Developing and Transition countries (DTCs) at IBRD, bringing them to 47.19 percent.

An increase in the voting power of Developing and Transition Countries at IFC to 39.48 percent.

An agreement to review IBRD and IFC shareholdings every five years with a commitment to equitable voting power between developed countries and DTCs over time.